Decentralized finance project Mango Markets and its related entities have reached a settlement with the U.S. Securities and Exchange Commission (SEC) over unregistered security and broker activities. The settlement comes after a high-profile exploit of Mango Markets in 2022, resulting in significant losses.
The SEC charged Mango DAO with selling unregistered MNGO tokens and providing unlicensed broker services through Mango Labs LLC and Blockworks Foundation. As part of the settlement terms, the entities are required to destroy their MNGO tokens, cease trading of the tokens on crypto exchanges, and pay a $700,000 penalty.
The SEC complaint alleged that Mango DAO and Blockworks Foundation raised over $70 million in August 2021 through the sale of MNGO tokens to investors, including those in the United States. Additionally, Mango Labs was accused of acting as an unregistered broker by soliciting users and providing financial advice in violation of securities laws.
The settlement with the SEC is a significant development in the regulatory landscape of decentralized finance projects. It follows the exploit of Mango Markets by Avraham Eisenberg, who manipulated the platform’s rules to incur losses of over $110 million. Eisenberg has been convicted of fraud and market manipulation, with sentencing scheduled for December 12.
The Mango Markets settlement highlights the increasing scrutiny on DeFi projects and token offerings by regulatory authorities. It serves as a reminder for investors to conduct thorough research before engaging in such investments.
Disclaimer: The information provided in this article is for general market commentary and does not constitute investment advice. Readers are advised to conduct their own research before making investment decisions.
